JPY remained the focal point for Asia, well that was until the market realized it had finally turned. The JPY took out the 109 handle and dealers were less concerned and comfort returned to the Nikkei. The session went from strength to strength closing up almost 2% on the day. The Shanghai and Hang Seng performed closing up over 2% on better than expected data but the HSI was especially strong closing up 3.2% on the day.

It really was no surprise that Europe opened strong with previous safe-havens losing ground as markets loaded-up on risk. Strong Export data helped Energy, Miners and Banks following on in the firm belief that we have finally turned the corner. The French CAC closed up 3.3% and Italy’s MIB was up 4.1% as we saw strong gains in the banking sector. DAX and FTSE saw gains of 2.7 and 1.9% respectively with FTSE gaining on the back in the Energy sector mainly.

Given that Europe is now convinced China has turned the corner (strong overnight Export data) and following the gains seen in Europe the cash Dow opened well and after a small respite (Retail Sales), finally took the bull by the horns and marched firmly higher. DOW closes up 1%, along with the broader S+P while the NASDAQ closed up 1.5%.

Oil drifted after yesterdays move closing down around 1.5% and we also Gold lose some of its recent attraction as a safe-haven. Closing down today 1.2% sees the price around the $1233 level having rejected the Weekly Bullish Reversal.

The  Bond Markets did have a little wobble early in the session on the back of additional supply but managed a recovery by the close. Again we are seeing a pattern of “Good data – Curve flattens” and today was no different. US 2’s closed 0.75% whilst 10’s closed 1.76% marking the 2/10 curve at +101bp. 10yr German Bunds closed 0.13% (-3bp) on the day. This closes the spread US/Germany at +163bp. Italy 10yr closes 1.29% (-8bp), Greece 9.05% (+21bp), Turkey 9.34% (-9bp), Portugal 10’s 3.21% (-21bp) and Gilt 10yr 1.42% (-2bp).

Given the renewed confidence the DXY experienced a strong rally pushing it back just over 95. GBP and JPY lost around 0.5% the pair.

COMMENT: Marty, you hit the nail on the head. Nobody looks at these fines against the banks as you have. You are right. The shareholders pay the price to keep the bankers out of prison who still get their bonuses. It is one giant fraud upon the shareholder. They use the shareholder capital for personal insurance. Why would you own a bank stock?

HW

REPLY: Yes. Just look at the Dow Jones Financial index. It is nowhere near its 2007 high. You need a quarterly closing above 49510 to signal a rally or a quarterly closing below 38730 will be a major sell signal. This is what I have been talking about. The markets show you reality. The bank stocks are something to stay away from. The shareholders pay for the crimes of the bankers while the bankers still get their bonuses and have their get-out-of-jail-free card. Stay away from bank stocks. You are only a slush-fund for the bankers for there is never a criminal prosecution of anyone who designs these frauds because they hand piles of money to the Department of Justice and everyone is happy while government can PRETEND to be policing the bankers. This is like locking up your wife and kids because you were speeding on your way to work.

Judge John Walker, Jr

The Second Circuit back in March refused to reverse a contempt order imposed on an allegedly recidivist stock fraudster. What is amazing is Judge John Walker, Jr, Bush’s cousin,  grabbed his appeal and really abused his power. This guy should be driven from the court with tar & feathers like in the old days. Edward A. Durante, was sued by the SEC over a purported stock manipulation scheme involving Internet technology company Wamex Holdings Inc. Durante’s challenged the contempt order stating the contempt is not supported by clear and convincing evidence. No contempt in New York city ever complies with the constitution in federal court that I have ever seen.

Durante plead guilty to criminal charges based on the same conduct and was imprisoned from 2002 to 2009. He had paid over $35 million in assets handing them to his former attorneys in 2002 for restitution in the criminal case. He argued that the SEC has failed to show he had not been compliant with the government. The SEC contended that Durante was still on the hook for over $25 million to them. Durante argued that the default judgment was ambiguous, since it purported to be a disgorgement order yet also required Durante to turn over assets already seized by and relinquished to the government. Durante claimed he had already marshaled his assets for the government before his sentencing in 2003, and said SEC lawyers affirmatively represented to him in 2004 that the judgment was satisfied.

Nevertheless, Judge Walker found that because the default judgment instructed Durante to pay the funds to the “clerk of court”, any disgorgement by assignment or transfer of assets to a third party was irrelevant. So in other words, every agency can go after you for the same amount of money because Walker effectively held that if you paid even in full to one agency, it does not matter and cannot be credited toward another. There is absolutely no foundation in law for Judge Walker’s abusive pro-government decision.

Now this week, another contempt was imposed in New York City federal court confirming anyone who has any account tied to a New York entity should get the hell out of town and fast.  New York U.S. District Judge Paul A. Engelmayer on Tuesday said the founder of defunct hedge fund ThinkStrategy Capital Management LLC, who owes the SEC and others nearly $30 million, is still in contempt of court and must remain incarcerated indefinitely. Engelmayer said he was troubled by the lack of effort on the part of Chetan Kapur to show that he doesn’t have access to significant assets or to help his attorneys gain access to an email account which may shed light on whether or not he has funds in overseas bank accounts. In other words, he is in prison and will not be released until he PROVES he has no money overseas. The SEC has flipped the law so you are now guilty until you prove yourself innocent.

Now Kapur’s lawyers are considering taking legal action in D.C. federal court to compel the International Consortium of Investigative Journalists (ICIJ) to release the information from the Panama Papers on Kapur so they can prove this negative. So the ICIJ have all these documents which they are REFUSING to release probably because it impacts people they support like Hillary, and the public really does not know the full truth. This case may be very interesting since the only way for Kapur to now get out of prison is to prove he does not have funds overseas. Contempt is supposed to be “coercive” so this requires you to do something that the court “knows” you can do. To imprison someone indefinitely because he “might” have funds overseas you do not know about is exactly opposite of the law and violates human rights. You cannot prove a negative and there is no possible way any federal judge in New York would ever believe a citizen over the government. It will NEVER happen. There have been a few exceptions of an honest judge. But they are rare indeed. The NY Federal courts no longer follow innocent until proven guilty. They are using contempt where suspicion is equivalent to proof; trial to condemnation if they would allow you a trial and with contempt they say you have no right to a public trial.

No one should have any account in New York City simply because they can do whatever they want and you have no chance of going to court and getting a fair heading against any of the New York bankers. Just stay the hell out of that town. MY STRONGEST ADVICE – DO NOT HAVE ANY ACCOUNT WITH ANY INSTITUTION DOMICILED WITH ITS HEADQUARTERS IN NEW YORK CITY. The Southern District of New York will protect the banks 120% against any customer. Deal ONLY with institutions domiciled in other states (NOT A BRANCH OF A NEW YORK BANK OR BROKER). It is impossible to obtain a fair trial in NYC and Judge Walker will deny you a trial under the pretense that a judge’s personal desire for power supersedes the constitution and still has the powers to act as they did under King George III. In other words, the American Revolution did not change any powers of a judge. Congress passed a limit to civil contempt of 18 months imprisonment maximum, 28 USC 1826. Judge Walker has ruled judges have “inherent” power that Congress cannot override and due process of law has no restraining impact.

Many argue you cannot do business in Russia or China because they still lack the RULE OF LAW. I am sorry, but so does New York City. When I asked a lawyer in New York why the government never charges bankers; his response was telling: “You do not shit where you eat.” There is simply no hope to save the system anymore without a complete crash and burn. Even if you found a journalist who would champion your case, they are subject to their editors and follow the commands of management who in turn are also subservient to the bankers. It is hopeless. All you can do is get out of town. These judges will imprison you for life in New York City using contempt and deny you any trial and they are void of any pity or remorse no less honor. It is now the judges who have complete contempt for the Constitution, human rights, and the RULE OF LAW. When the RULE OF LAW collapses, so does society.

Edward Gibbon wrote in his Decline and Fall of the Roman Empire:

“Suspicious princes often promote the last of mankind, from a vain persuasion, that those who have no dependence, except on their favor, will have no attachment, except to the person of their benefactor.”

Edward Gibbon wrote of him: Each

“distinction of every kind soon became criminal. The possession of wealth stimulated the diligence of the informers; rigid virtue implied a tacit censure of the irregularities of Commodus; important services implied a dangerous superiority of merit; and the friendship of the father always insured the aversion of the son. Suspicion was equivalent to proof; trial to condemnation. The execution of a considerable senator was attended with the death of all who might lament or revenge his fate; and when Commodus had once tasted human blood, he became incapable of pity or remorse”

(Book 1, Chapter 4).

llinois motorists are living in a bankrupt state that has promised pensions it never funded. Their state constitution bars the politicians from reducing the pensions so the net result, tax payers must pay a lot more to fund pensions of government workers. As oil prices have collapsed, tax revenues have dropped. The net result, the proposal made by Democrat State Sen. John Cullerton imposes a new tax upon residents forcing them to pay 1.5 cents per mile that they drive. Taxes will rise further and further as the States move into major deficits and as interest rates rise, they will be compelled to raise taxes drastically.

The reason we seriously need a new Constitutional Convention is because the current one has been reduced to a scrap paper. President Obama’s outrageous suggestion that mishandling classified documents in the case of Hillary Clinton is not necessarily a criminal offense only serves to illustrate that this is purely politics. Hillary belongs in jail and what she did was for personal gain whereas Obama calls Snowden a traitor for leaking documents that exposed government lies. He wants to imprison Snowden for life while excusing Hillary for a life of crime getting donations from foreign governments selling influence as Secretary of State. Obama’s intention to keep a prominent Democrat out of jail so the Democrats can win is a low-life corrupt act demonstrating it is who you know that counts and the rule of law means nothing. He is even seeking an 18% increase in pay TAX FREE for past presidents to enrich himself.

Obama tries to justify not prosecuting Hillary pointing to the complexity of U.S. law regarding secrets. Neverthless, it has been his administration which has brought far more prosecutions for any disclosure of classified information under the Espionage Act of 1917 than all other presidencies combined. Obama is playing the political card knowing that the press will not expose the truth and a Democratic victory is far more important than the rule of law.

Even the Romans created the office of the Tribune who could bring any official to justice. We have the Inspector General which is mimicking the Roman Tribune, but it has no power to act independently and prosecute politicians which was the entire purpose of the Tribune. Without an independent Inspector General, which could indict even the President, we do not stand a chance of a fair and honest government that has the same standard for someone like Snowden and Hillary.

We need a Constitutional Convention to rewrite the Constitution. Of course, that would be a preventative measure reforming corrupt politics. Therefore, it will NEVER take place until we crash and burn. Then, and only then, is reform possible. The corruption is so prevalent, this reminds me of reaching the crossroads of Didius Julianus (193AD). The Praetorian Guard, or what we would call the Secret Service today, outright murdered the Emperor Pertinax (President) and the full corruption of Roman bureaucracy burst forth. After parading around with the head of Pertinax on a pole, the Guards withdrew to the safety of their camp. No clear heir was available so the Guards stationed heralds on the wall to announce openly that the office of Emperor was up for sale to the highest bidder.

Thus began perhaps the most scandalous affair in Roman history. The corruption had reached such open levels that the decline and fall of the Roman Empire began at this moment in time. There were two rival bidders who presented themselves – Titus Flavius Sulpicianus (father-in-law of Pertinax) and Marcus Didius Julianus. Didius’ bid was 25,000 sestertii per man, which was the high bid and he was duly declared Emperor.

Didius Julianus quickly found himself in serious trouble. The treasury had been depleted much more so than he had expected and he minted coins to pay for the bribe he promised reducing the weight and metal content. When the outrage of auction off the office of president (emperor) led to outright civil war, Julianus found himself deserted by the Praetorians who were not about to defend him against Roman legions marching against them that far outnumbered their ranks. This would be like the US Army march in to vanquish the tiny office of the Secret Service. There could be no match. Julianus was officially deposed by the Senate and sought refuge in his deserted palace as the Praetorians fled. Julianus was beheaded on June 1st/2nd, 193AD after a reign of only 66 days.

Have we reached our crossroads in open political corruption? Today, rejecting Trump because the elite do not like him and installing their own pick for the candidate who never ran would amount to the same auction process that Julianus won. Oh; how corruption repeats. Just change the names and time frame. It all becomes the same.

The Dow Jones took out the Weekly Bullish but not the key one at 17846. This is why we are basing without immediate follow-through. Nonetheless, our primary technical targets for the year stand at 17345, 18791 and 18880. Holding the 17345 level warns that we are still move to the upside. A weekly closing above 17846 will signal a retest of the major highs and the potential to make a new high even yet. We can see that from the chart above that the technical support on the weekly level rests at the 17619 area. Holding this is warning that further upside is likely. Keep in mind that BECAUSE we made the new lows in the NASDAQ and in the S&P500 but not the Dow, demonstrates what we have been warning about that this is still a capital inflow for the USA.

The negative interest rates are creating a real crisis. This was the real reason why Yellen met at the White House. We are moving toward the realization that the central banks have created an impossible situation from which there is no escape. Keeping lower interest rates because all levels of government are hopelessly in debt is wiping out the pension funds.

From a timing perspective, we still see the key weeks ahead as 04/25 and 05/09 with volatility picking up in May and then we have a Directional Change cluster in June near the BREXIT vote. Keep in mind that many in Europe and praying Britain votes to exit for they see this as the catalyst for the demise of the EU.

We see a similar pattern for a breakout on the monthly level with 17666 and support closing in at 17258. Even the oscillator is starting to show a potential breakout to the upside. Keep in mind that the major Phase Transition move is probably not yet ready until 2018. But this is looking highly probably at this point in time.

The timing clearly is showing June and August as key targets for now. This is centered around the BREXIT vote in June and the Republican Convention at the end of July. Directional changes are warning of a choppy affair until the first quarter next year.

Keep in mind that this is the most pessimistic rally in history with the highest short-interest. This is why the market keeps pushing higher, yet slowly. It is eating through the pessimistic analysis and when rates begin to rise, there will be another wave a selling trapping the bears latter in the year.

The Daily Bearish lies at 17434 and the Weekly Bearish lies at 16820. So as long as these two Reversals hold, then the basing at higher levels is being maintained.

Sometimes the brain-dead decision of one person can set off a contagion that sweeps the world. Merkel’s open invitation to the Muslim, pretend refugees has been tearing Europe apart. The majority are not even from Syria. European states will raise their borders and require a passport because so many of these Muslim “refugees” are unaccounted for, especially after the Brussels attack.

Ted Cruz had to respond to the rising support for Trump over this immigration issue, as it is also becoming the main focus in Britain. Cruz said Trump cannot block Muslims, so he proposed the politically correct version: all Europeans must get a visa to enter the USA. Now Europe is responding as nations always do and the European Union (EU) is currently considering requiring U.S. citizens and Canadians to apply for visas before visiting the country of their choice, even if it’s for a short vacation. Currently, visitors to the U.S. from Poland, Croatia, Cyprus, Bulgaria, and Romania all need a visa. Romanians and Bulgarians also need visas for Canada. The European Commission claims it is trying to achieve a full visa waiver for all member states, but in reality, this is a standard response to Cruz’s statement that he would introduce legislation to impose a visa requirement on all Europeans. The fear is that the Muslims who are interested in terrorism can get into the USA easily via Europe because of what Merkel has done. So we face the problem of closing borders within the EU because the refugees will spread, and that, unfortunately, becomes only logical. It does not appear to be reversible.

Jimmy Durante captures the mood of the nation during the Great Depression in 1933 basis FDR’s program.

Over 400 protesters were arrested in Washington for exercising their First Amendment right Assemble and Free Speech. They were protesting the ownership of Congress by the banks and corporations. The movement is known as #DemocracySpring and is expected to run for the week. It has been taking place on Twitter and Facebook. Of course, politicians rely upon that money so they will throw these people in jail rather than address the issue.

On Monday, the U.S. Department of Justice announced that Goldman Sachs has agreed to plead guilty again and will pay $5.06 billion for its role in the 2008 financial crisis. The settlement, over the sale of mortgage-backed securities from 2005 to 2007, was first announced in January. Of course, none of the bankers will ever go to prison and the shareholders pay to protect the individuals who actually act in a criminal manner. This is really fraud upon the shareholders who have to pay fines to keep the bankers out of prison.